Dundee United chairman Stephen Thompson overseeing cut-backs after club post losses of £1.55 million

Dundee United chairman Stephen Thompson admits he is overseeing a cost-cutting programme at Tannadice after the club reported an annual loss of £1.55 million.

The deficit for the year to June 2016 would have been worse had United not sold Nadir Ciftic, Ryan McGowan and John Souttar after an operating loss of £2.53 million was posted.

A fall in league prize money and a drop match attendance income is blamed for a 21 per reduction in revenue to £4.61 million after the team spent the majority of last season at the Premiership basement before having their relegation confirmed to the second tier.

Jackie McNamara’s sacking in September 2015 and investment in the squad following Mixu Paatelainen’s appointment led to administrative expenses rising 38 per cent to £1.81 million.

Despite supporting manager Ray McKinnon in targeting promotion straight back to the top-flight, United plan to make £1.5 million of cost-savings during the current financial year.

Thompson said: “Despite the extreme disappointment with the outcome of season 15/16, the Board remains confident that it has taken and continues to take corrective measures to cope with the significant financial impact of relegation.

“The appointment of Ray McKinnon as first team manager in May 2016 and the subsequent restructuring of the playing squad was the first step in regaining the club’s place in the top tier of Scottish football. The new manager has been backed financially to build a team capable of securing a return to the Premiership.

“Much work is being done in parallel with our on-field investment to reduce operating costs even although relegation has added a significant financial challenge. Salary and operating expenses will remain under scrutiny, and because of this ongoing diligence we remain confident that the positive effect will be demonstrated when we report our next figures.”

A club statement added: “The process is well underway, and the full effect will be demonstrated in the next annual financial figures when the board expects to report cost reductions in the region of £1.5 million.

“The latest annual accounts show the adverse economic effect of a season of poor football results in the Ladbrokes Premiership which led to eventual relegation.”

After posting profits of £3.94 million for the year until June 2015, the club reduced their debt to £1.2 million from a high of £7.3 million in 2007.